Base metals prices were steady at the close of Monday's London Metal Exchange (LME) trading, with supply tightness and plant closure news encouraging buying after profit-taking earlier in the day, traders said. Confirmation that Swiss-based commodity producer and trader Glencore International was closing 90,000 tonnes of zinc capacity at its Portovesme lead-zinc complex in Sardinia, sent zinc prices up $12 to $1,300 a tonne.
Glencore also said output at the 110,000 tonne per year electrolytic zinc refinery at Portovesme would increase.
"The Portovesme closure talk has been running about the market for a while but, combined with the Espanola del Zinc bankruptcy news, it may have spooked a little buying interest," one LME trader said.
Spanish zinc producer Espanola del Zinc said it would seek voluntary bankruptcy after failing to reach an agreement with creditors on rescheduling debt payments, the company said on Friday.
Zinc closed at $1,298, up $10 and near last week's 7-1/4 year of $1,307.
Copper pared earlier losses to close $4 lower at $3,082, supported by tightness in cash to three months spreads, which hit a $187 premium, the highest in eight years.
A week ago this rate stood around $150, while at the start of the year it was at $115.
Traders said physical shortages, low stocks and an absence of lenders lay behind the tightness, with the backwardation on course to exceed $200.
Traders noted significant end-of-month cash buying, which helped support the three month contract.
Aluminium was at $1,849, up $7.
The aluminium cash to three-month backwardation was at $18, up from $7 last week.
"If the outflows from exchange warehouses continue we could see more buying," the trader said.
Since mid January LME stocks have reverted to the downward path they followed when stocks fell from 1.45 million tonnes in late January 2004 to 698,000 tonnes in mid-September. On Monday they stood at 663,325 tonnes.
Other prices also rose, with lead up $3 at $935, tin up $10 at $8,010 and nickel up $100 at $14,525.